The Agency by Agency Atlas 2026 Agency size

Between these two poles, the data on growth, productivity and funding tells a more nuanced story still, one in which bigger does not always mean more productive, and where the flow of investment and innovation funding follows patterns that are not always easy to predict.

A sector of two halves

Six in ten agencies in the UK have a headcount of just one or two people. They account for 62% of all active agencies, yet generate just 3.2% of total sector turnover, employ 7.6% of the workforce and are, on average, shrinking. At the other end of the spectrum, agencies with 251 or more employees represent just 0.6% of businesses, but account for 48.7% of total turnover, 38.3% of the workforce and are growing at 24.4% on average.

The agency sector contains, within its 24,747 businesses, two largely separate economies operating under the same label. One is a vast landscape of nano agencies. The other is a comparatively tiny cohort of large and mid-sized agencies. Understanding which part of the sector you are talking about, and to whom, matters enormously for policy, investment and strategy.

Almost two thirds of active agencies are nano agencies

Agencies with one or two employees account for 62.0% of all active agencies in the UK. The next largest group, those with three to ten people, makes up a further 23.0%. Together, agencies with ten or fewer employees represent 85% of all businesses in the sector. Beyond that threshold, numbers fall sharply: 6.8% of agencies have eleven to twenty people, 5.2% have twenty-one to fifty, and fewer than 3% of agencies employ more than fifty people. The sector is, by number, overwhelmingly a landscape of small and nano-businesses, a reflection of the low barriers to entry in creative and marketing services, and the prevalence of freelance and consultancy models at the smallest end.

“The mood music within the agency sector can often be driven less by the fate of the many small agencies than by the health of the few large ones.”

— The Agency by Agency Atlas 2026

Agency workforce and sector turnover is concentrated in a small number of large agencies

Despite making up just 0.6% of active agencies, businesses with 251 or more employees account for 38.3% of the total agency workforce. The 1–2 person agencies that dominate agency numbers employ just 7.6% of the total workforce. 

The relationship between size and workforce share is not linear: the mid-sized bands (21–50 and 101–250) also punch above their weight in employment relative to their share of agency numbers. The sector’s jobs are concentrated in a relatively small number of larger businesses, which means that employment trends and, in turn, the mood music within the agency sector can often be driven less by the fate of the many small agencies than by the health of the few large ones.

The influence of the larger agencies is even more pronounced when we look at size of agencies and total turnover. Agencies with 251 or more employees generate 48.7% of total sector turnover, despite representing 0.6% of all agencies. The 101–250 band adds a further 18.8%. Together, agencies with more than 100 people account for more than two thirds% of all sector revenue while representing just 1.5% of businesses. 

At the other end, the 62% of agencies with one or two people generate just 3.2% of turnover. The revenue distribution is as extreme as it is because large agencies benefit from scale advantages that compound over time: multi-year client relationships, retainer-based income, the ability to offer integrated services and the margin that comes from operational efficiency.

What does this concentration tell us about the sector? On the one hand, it might point to a healthy division of labour, with large agencies serving the biggest clients while the smallest fill in the gaps. On the other hand, it might also suggest that the conditions for smaller agencies to grow are harder to achieve than they should be.

If the vast majority of agencies by number account for a relatively small share of turnover, despite their important contribution, what does this mean for the ambitions of the sector as a whole and for the policymakers tasked with supporting its growth?

Growth rates increase with size

The number of agencies in the smallest size cohort (1 to 2 headcount) means that they have an outsized influence on the average growth rate of agencies across the sector. Indeed, our data shows that this cohort is, on average, shrinking at a rate of -1.7% with every other size category showing growth far above the sector average. The highest average growth rates can be found in agencies with 101 to 250 headcount (25.2%), followed by 251+ headcount (24.4%) and 51 to 100 headcount (18.7%). 

There is presumably an element in which size begets growth, as larger agencies have the client relationships, resources and capabilities to grow more quickly. Or the direction of causality might be the other way around, with the most ambitious and capable agencies being the ones that have grown larger over time.

With so many nano agencies in the sector, the data also might cause us to wonder about what would it take for the many thousands of tiny agencies to make the transition into the next size bracket… and how many of them, indeed, actually want to?

As we have seen elsewhere in the Atlas, these simple growth figures only tell some of the story. Using the growth traffic light we can see the proportion of agencies that are growing, shrinking or stable within each size bracket. The vast majority of the smallest agencies (1 to 2 headcount) are classified as Stable (80.7%). Roughly a third of agencies with a headcount of 3 to 10 are Growing or Growing Fast (33.1%) but 8.4% of these agencies are also Shrinking or Shrinking Fast.

What is especially interesting is the proportion of high-growth (more than 20% annual growth) agencies in all age brackets above the smallest. The highest proportion of high-growth agencies can be found in the largest two size brackets, where more than a third of all agencies can be classified in this way.

Agencies of all sizes make an important contribution to the economy

It is unsurprising that the largest agencies, despite being few in number, make the largest contribution to the UK economy when measured by estimated total GVA. Indeed, the 129 agencies with a headcount of 251 and more contribute an estimated £4.2bn in GVA together.

But the 1-2 person agencies are collectively making a sizable contribution too. When counted together, those nano agencies contribute an estimated £1.3bn in GVA, and when counted together with those in the next size bracket, agencies with a headcount of one to ten employees make a total contribution of £3.1bn.

The largest generate the most total value, but the smallest lead on productivity

When we use gross value added per employee as a measure of productivity, we can see that here the smallest agencies are slightly outperforming their much larger peers. The average GVA per head across the UK agency sector is £94,452, and in general the range is narrow, with the smallest agencies generating £99,736 in GVA per head, compared to £94,857 for the largest. The figure declines gradually from the smallest to the 101–250 band (£89,786) before recovering slightly at 251+. 

One thing that the productivity data suggests is a potential reframing of how we think about agency size. If the smallest agencies are generating more value per employee than the largest, what does that tell us about the models they operate, the clients they serve and the work that they do? 

And if the largest agencies dominate total GVA by virtue of scale alone, does that represent the most efficient use of the sector’s collective talent, or is there an argument that more support for smaller, highly productive agencies could unlock significant additional value for the wider economy?

Investment and innovation funding flows to the middle

The investment and innovation funding data offers some intriguing findings when we look at agency size. For example, investment funding has mostly been directed towards agencies in one of two distinct size categories: agencies with a headcount of 3 to 10 (48.9% of all investment funding) and agencies with a headcount of 21 to 50 (26.3% of all investment funding).

This pattern likely reflects the venture and growth investment model, which targets businesses at an inflection point who are large enough to have proven their model and small enough to still offer significant upside. The nano agency market, by contrast, appears largely outside the investment landscape.

Innovate UK grant funding is spread a little differently, although weighted towards small and mid-sized agencies, before an uptick with the largest of agencies. The size category with the highest share of Innovate UK funding is headcount 11 to 20 at 30.7% (compared to their 7.6% share of investment funding), followed by headcount 3 to 10 with 22.1% of grant funding and headcount 21 to 50 with 16.5%.

Agency size and questions for the sector

The size data raises a question that sits beneath almost every other analysis in this report: when we talk about the agency sector, which agencies are we actually talking about?

The structural divergence between nano agencies and larger businesses presents a genuine design challenge for anyone trying to understand and support the sector, for example with regards to the Industrial Strategy. This is oriented, understandably, towards scale, growth and innovation, criteria that describe perhaps 5–10% of the agencies our Atlas maps. 

The 62% of agencies with one or two employees are unlikely to be the primary beneficiaries of cluster investment, R&D labs or trade mission support. If the strategy is to genuinely serve the breadth of the creative sector rather than its most visible tier, it needs a different set of interventions for micro-businesses, or an honest acknowledgement of the trade-offs involved in targeting support at growth businesses only.

The path from micro to small, and from small to mid-sized, is where growth momentum begins to build, and the data shows clearly that something changes at the three-to-ten threshold. Whether that transition is primarily about talent, client mix, service breadth or financial structure, we cannot say, but it is a question worth asking directly.

For the sector as a whole, and as a creative industry in which the vast majority of businesses are, on average, standing still or contracting while a small minority accelerate away, there are questions about diversity, resilience and what kind of sector it will look like in a decade’s time or perhaps even sooner. The concentration of revenue, growth and investment at the larger end is not inherently a problem, but it does mean that the sector’s future is being shaped by a very small number of businesses, and that the conditions that allow businesses to move up the size ladder might require more attention than they currently receive.